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2019 (10) TMI 42 - HC - VAT and Sales TaxDeletion of penalties u/s 8-D(6) of the U.P. Trade Tax Act, 1948 - deduction of tax at source - Whether penalty under Section 8-D (6) could have been imposed on the assessee though it was not obliged to make deduction of tax at source under N/N. 2401 dated 27.4.1987? HELD THAT:- The applicability of Section 8-D (1) and therefore, requirement to make deduction of tax at source, had been created specifically with respect to payments made under contracts awarded by specified persons, namely, the Central Government, State Government, local authorities, a corporation or undertaking established under a Central or State Act or a company or a co-operative society, or club or firm or other association of person, whether incorporated or not. In the modern sense of the term, departed from it's origin, it is difficult to treat universities such as the assessee as a corporation or undertaking, especially in the context of the aforesaid taxing notification, that apparently seeks to identify different categories of persons, made liable to deduct tax at source. Used in that sense, the words corporation and undertaking clearly refer to status of the person as a corporation or an undertaking only, while university is primarily seen and understood as an educational institution and not a corporation or undertaking. Being a provision creating liability under a taxing status, it has to be strictly read and no other rule of interpretation is required to be invoked. Inasmuch as, the assessee being a university does not naturally or freely fall within the description of any of the persons specified under Clause (a) (e) of the Notification No. 2401 dated 27.4.1987. No attempt is to be made to force it to fit into description of any person made liable under the notification. Hence, the assessee was never required to make deduction of tax at source on payment made to its contractors. Therefore, no penalty was leviable on that count. Revision allowed - decided in favor of revisionist-assessee and against the respondent-revenue.
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